20 March 2023Analysis

AM Best: French re/insurers rethinking nat cat pricing

The growing frequency and severity of weather-related events such as drought, storms and wildfires are prompting French insurers and reinsurers to rethink their appetite and pricing for natural catastrophe risks, according to a new report from AM Best.

The report, “French Insurers Reconsider Natural Catastrophe Assumptions Following Another Very Expensive Year”, notes that record-breaking temperatures and severe droughts led to significant property damage losses in 2022.

The latest estimate from France Assureurs puts insurers' weather-related natural catastrophe losses for 2022 at around €10 billion, prompting reinsurers to push up prices and tighten conditions in the January 1 renewals.

According to AM Best the report looks at how 2022 was another very expensive year for insured natural catastrophe losses in France and claims that recent weather-related claims experience is forcing French insurers and reinsurers to reconsider their assumptions with respect to natural catastrophe frequency and severity.

As a result it said that insurers and reinsurers are expected to increase premium levels and reduce their risk appetite for natural catastrophe events in response to increasing actual and expected losses.